Lohia Auto targets Rs 500 crore in revenue by 2020

NEW DELHI: A new entrant in the three-wheeler segment, Lohia Auto has set ambitious targets for itself, especially given the fact that a big part of the company's portfolio includes electric vehicles like e-rickshaws and electric-two wheelers which are still to see strong traction in Indian market.

The Noida-based automaker is planning to breach the Rs 500 crore mark by the end of 2020. This, the company says, will have equal contribution from electric vehicle and recently entered diesel three-wheeler segment.

"We expect our revenues to triple every year from here on as the investments we have made are finally starting to show results," said Ayush Lohia, CEO, Lohia Auto. "We hope both our electric vehicle portfolio as well as diesel portfolio to do well going forward."

Lohia Auto is currently present in three vehicle category namely electric two wheeler, e-rickshaw and diesel-powered three wheelers.

Started with the electric two wheeler segment, Lohia said that early years were a struggle given that there was no support from government which resulted in high cost of the vehicle, making it unviable for the consumers. "We think we were a little bit ahead in introducing our electric scooters in 2008. There were hardly any takers at that time."

However, he said that the times have changed considerably and in FY2017, they hope to start making profits in the segment.

Without divulging much information, Lohia said that they are yet to break even in the electric vehicle business but hope 2017 to be the watershed year for them.

The non-performing electric vehicle segment was the reason for Lohia Auto to look at diesel three wheeler as well to sustain the business. "In the initial years, all we were doing was pumping in money without any results and that is why we decided to enter the three wheeler segment," informed Lohia. "It was last year that we went pan-India with our three wheeler. Although no very high yet, we were able to do basic sales numbers for the three wheeler.

Lohia sells 3Wheelers in passenger and cargo segment under the brand name 'Humsafar.'

While it is the diesel-powered vehicles which are the more successful products for the company, Lohia is seeing its electric range of products pick up momentum as well. The widening acceptance of e-rickshaws around the country is a one of the reasons Lohia has based his optimism on.

"More and more states have now regularised e-rickshaws and are now turning into major markets for them. "We will expand our manufacturing footprint into Eastern and Southern parts of India as soon as we reach a decent capacity utilisation at its plant in Kashipur, Uttarakhand.

Lohia Auto's plant has has an installed capacity of 100,000 units annually and has the possibility of expansion. However, Ayush Lohia said that, "seeing at the way states are developing around the country, they will invest in new new manufacturing units around the country to reduce the transportation costs.

In the next few years, Lohia Auto will invest Rs 15 crore - Rs 20 crore in product development.

The electric vehicle maker also recently entered into a 50:50 joint venture with UM Motorcycles, an American motorcycle brand. The production for the UM motorcycles will start next month and we will start with initial capacity of 20,000 units a year.

Lohia Auto will take this capacity up to 40,000 units in the next one year. The UM Motorcycles, which came to India in 2014 Auto Expo, launched its two cruiser motorcycles Renegade Sport S, Commando, Classic two years later in Auto Expo 2016. The Renegade Sport S has been priced at Rs 1.49 lakh, Renegade Commando at Rs 1.59 lakh and the Renegade Classic at Rs 1.69 lakh (ex-showroom Delhi)

Speaking on why it took the company two years to launch the motorcycles, Lohia said that they wanted to bring products which were more India specific. "The bikes which have been launched in India have designed primarily for Indian condition keeping Indian consumer in mind. The bikes are also highly localised as nearly 60 percent of the components are sourced from India."

Lohia said that in future, they will look at expanding the UM Motorcycle range beyond cruisers.

Prices of most SUVs were cut between Rs 1.1 lakh and Rs 3 lakh following the implementation of GST, which subsumed over a dozen central and state levies like excise duty, service tax, and VAT from July 1.